“borrowed satisfaction”

ReassessmentSection 147Section 1471,326 judgments

The decision most relied on for borrowed satisfaction is PCIT v. Meenakshi Overseas Pvt. Ltd. (395 ITR 677), cited in 471 judgments on BharatTax.

Leading authorities on borrowed satisfaction

PCIT v. Meenakshi Overseas Pvt. Ltd.

395 ITR 677 · 2017 · High Court

471

citing judgments

Reassessment proceedings initiated solely based on an investigation wing/appraisal report, without the Assessing Officer's independent application of mind to form a 'reason to believe' that income has escaped assessment, are beyond jurisdiction, bad in law, and void ab initio.

394 ITR 146 (Guj.) 2. Varshaben S. Patel v. ITO

338 ITR 51 · 2011 · High Court

295

citing judgments

Reasons for reopening an assessment must be specific and not vague, scanty, or based on borrowed satisfaction. The Assessing Officer must quantify the escaped income.

222 Taxman 15 (Gujarat)(MAG.), Principal Commissioner of Income-tax-4 v. G & G Pharma India Ltd.

384 ITR 147 · 2016 · High Court

274

citing judgments

An assessment can be reopened if there is tangible material indicating escapement of income, demonstrating a live link between the material and the reasons recorded for reopening. The Assessing Officer must apply their mind to the material facts, and the sanction under section 151 should not be based on borrowed satisfaction.

CIT v. SFIL Stock Broking Ltd.

325 ITR 285 · 2010 · High Court

243

citing judgments

Reassessment proceedings under Section 147 are invalid and void ab initio if initiated based on 'borrowed satisfaction' without the Assessing Officer's independent application of mind, or merely on documents already available on record without fresh tangible material.

Sarthak Securities Co. Pvt. Ltd. v. ITO

329 ITR 110 · 2010 · High Court

217

citing judgments

Reassessment proceedings under Section 147 are invalid if the Assessing Officer records satisfaction based on borrowed satisfaction or information without independently applying their mind and forming their own 'reason to believe' that income has escaped assessment. The AO must arrive at an independent conclusion, not merely act on a report from an investigation wing without due diligence.

ITO v. Selected Dalurband Coal Co. (P.) Ltd.

217 ITR 597 · 1996 · Supreme Court

180

citing judgments

The Assessing Officer's belief that income has escaped assessment, leading to the reopening of an assessment, is a matter of subjective satisfaction. The materials available at the time of forming this belief do not need to conclusively prove the escapement of income.

CIT v. SPL’s Siddhartha Ltd.

345 ITR 223 · 2012 · High Court

164

citing judgments

Reassessment proceedings under Section 147 are invalid if the sanction required under Section 151 is obtained mechanically, without independent application of mind by the sanctioning authority, or is based on borrowed satisfaction.

CIT v. Atul Jain

299 ITR 383 · 2008 · High Court

147

citing judgments

Reassessment proceedings under section 147 are not valid if the information relied upon by the Assessing Officer is vague, scanty, and lacks specific details linking it to the assessee's transactions.

Judgments citing borrowed satisfaction

Yogeshkumar Omprakash Agarwal, Borivali East vs. Ward 32(1)(7), Bkc Bandra

In the result, the appeal of the assesse bearing ITA No

ITA 3428/MUM/2024[2012-2013]Status: DisposedITAT Mumbai13 Aug 2024AY 2012-2013

For Appellant: Shri Bhupendra ShahFor Respondent: Shri Anoop Hiwase, Sr.DR

Section 133(6)Section 143(3)Section 147Section 148Section 234ASection 250Section 271Section 68

passing order of reopening u/s 147 for the alleged full value of sale of Rs.41,83,450/-. a. merely on the basis of borrowed satisfaction, b. presumption and surmises and c. relying upon information from Investigation wing d. Based on wrong reasons because all transactions pertain to Yogeshkumar Agarwal

Sadhna Agarwal, Ghaziabad vs. Income Tax Officer, Ward-2(2)(4), Ghaziabad

Appeal is allowed for statistical purposes

ITA 960/DEL/2024[2012-13]Status: DisposedITAT Delhi13 Aug 2024AY 2012-13

Bench: Shri Kul Bharatassessment Year: 2012-13

Section 133(6)Section 142(1)Section 147Section 148Section 249(4)Section 249(4)(b)

basis of information received without any application of his mind. It is settled position of law that reopening on the basis of borrowed satisfaction is invalid. 7. That the assessment proceedings are vitiated since the computation of income has not provided to the appellant. 8. The Id. CIT (A) ought

Atul Shamji Bharani, Mumbai vs. DCIT CC- 4(1), Mumbai

Appeal are allowed

ITA 2023/MUM/2023[2011-12]Status: DisposedITAT Mumbai09 Aug 2024AY 2011-12

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Vinod Kumar BindalFor Respondent: Shri Ajay Chandra

Section 10(38)Section 132Section 143(3)Section 147Section 148Section 151Section 153ASection 250Section 68Section 69C

approval of the PCIT was a mechanical approval without recording any independent reasons u/s 151 of the Act, merely on a borrowed satisfaction on an information supplied by investigation wing with no independent application of mind, and preliminary verification of facts before issuing notice

Atul Shamji Bharani, Mumbai vs. DCIT CC- 4(1), Mumbai

Appeal are allowed

ITA 2022/MUM/2023[2013-14]Status: DisposedITAT Mumbai09 Aug 2024AY 2013-14

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Vinod Kumar BindalFor Respondent: Shri Ajay Chandra

Section 10(38)Section 132Section 143(3)Section 147Section 148Section 151Section 153ASection 250Section 68Section 69C

Lks Bullion (Import and Export) Pvt.Ltd., Ahmedabad vs. The Income Tax Officer, Ward-2(1)(3), Ahmedabad

In the result, the appeal by Assessee is partly allowed

ITA 382/AHD/2022[2010-11]Status: DisposedITAT Ahmedabad08 Aug 2024AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.382/Ahd/2022 "नधा"रण वष" /Assessment Year : 2010-11 L.K.S. Bullion (Import & The Income Tax Officer बनाम/ Export) Pvt.Ltd. Ward-2(1)(3) 368, Lks House, Ahmedabad – 380 014 V/S. Khetarpal-Ni-Pole Manek Chowk Ahmedabad -380 001 (Gujarat) "थायी लेखा सं./Pan: Aaacl 7369 N अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri S.N. Soparkar, Sr.Advocate & Shri Parin Shah, Ar Revenue By : Shri Alpesh Parmar, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 05/08/2024 घोषणा क" तार"ख /Date Of Pronouncement: 08/08/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Dated 27/08/2022 Passed By The Commissioner Of Income-Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “The Ld.Cit(A)” In Short] Arising Out Of The Assessment Order Dated 18/12/2017 By The Assessing Officer (Ao) Under Section 143(3) R.W.S. 147 Of The Income L.K.S. Bullion (Import & Export) Pvt.Ltd. Vs. Ito Asst. Year : 2010-11

For Appellant: Shri S.N. Soparkar, Sr.Advocate &For Respondent: Shri Alpesh Parmar, Sr.DR

Section 131Section 133(6)Section 143(1)Section 143(3)Section 148

detailed submission and order of lower authorities. He argued that the reopening of the assessment u/s.148 of the Act is on the basis of borrowed satisfaction and without application of mind. He also stated that the information received from the DDIT(Inv), Unit 6(4), Mumbai was required ... basis for the AO's belief, and his decision to reopen the assessment was justified. The AO’s action was not merely based on borrowed satisfaction but on specific information that required further investigation to ascertain the correctness of the transactions. Accordingly, Ground No.1 is dismissed, and the reopening

M/S Indovision Commodities Ltd., Kolkata vs. ITO, Ward-6(2), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 500/KOL/2024[2012-13]Status: DisposedITAT Kolkata06 Aug 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A. No.500/Kol/2024 Assessment Year: 2012-13 M/S Indovision Commodities Ltd. .....……………………....………....Appellant Block-B, Suit No.1A Mangalam, 24 & 26 Hemanta Basu Sarani, Dalhousie, Kol-1. [Pan: Aabcm8943Q] Vs. Ito, Ward-6(2), Kolkata…...................................................…..…..... Respondent Appearances By: Shri Sunil Surana, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit- Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : May 30, 2024 Date Of Pronouncing The Order : August 06, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 23.02.2024 Of The National Faceless Appeal Centre (Hereinafter Referred To As The ‘Cit(A)’) Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. For That The Notice U/S 148 & The Reassessment Completed By Ito Wd 6(4) Was Without Jurisdiction, Invalid & Bad In Law & Therefore The Entire Reassessment Is Liable To Be Quashed. 2. For That The Proceedings Initiated U/S 147 On Vague Reasons Without Any Tangible Material Or Independent Application Of Mind Simply On Borrowed Satisfaction, Suspicion & Surmises Were Bad In Law & Therefore The Entire Reassessment Is Liable To Be Quashed.

Section 120Section 143(2)Section 147Section 148Section 250Section 68

quashed. 2. For that the proceedings initiated u/s 147 on vague reasons without any tangible material or independent application of mind simply on borrowed satisfaction, suspicion and surmises were bad in law and therefore the entire reassessment is liable to be quashed. I.T.A. No.500/Kol/2024 Assessment Year: 2012-13 M/s Indovision

Deputy Commissioner of Income Tax, Aurangabad vs. Vista Nirman Pvt. Ltd., Mumbai

ITA 1340/PUN/2023[2011-12]Status: DisposedITAT Pune05 Aug 2024AY 2011-12

Bench: Shri R. K. Panda & Ms Astha Chandraassessment Year : 2011-12

For Appellant: Shri Jaiprakash BairagraFor Respondent: Shri Ajay Kumar Keshari

Section 132Section 133(6)Section 133ASection 142(1)Section 143(3)Section 147Section 148Section 151(1)

basic mandate of Section 147 of the Act, Reason to Believe is absent. 4. The Ld. Assessing Officer has reopened the assessment on borrowed satisfaction without verification of the alleged information/statements given by the third parties. 5. The Ld. Assessing Officer further erred in not supplying the exact reasons recorded ... Court in the case of PCIT vs. Shodiman Investments (P.) Ltd., 422 ITR 337 (Bom), he submitted that the assessment cannot be reopened on borrowed satisfaction without verification of alleged information / statements given by the third parties. 20 CO No.21/PUN/2024 26. Referring to the decision of the Hon’ble Bombay

Sheela Daniel, Mumbai vs. ITO 25(3)(4), Mumbai, Bkc Bandra (East)

In the result, appeal of the assessee ITA No

ITA 2675/MUM/2024[2007-08]Status: HeardITAT Mumbai02 Aug 2024AY 2007-08

Bench: Shri Br Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Bhupendra Shah, CAFor Respondent: Shri Pravin M Chavan (SRDR)

Section 143(3)Section 147Section 234Section 250oSection 271Section 56(2)(v)

basis of information received from DDIT (Inv) Unit-9(3), therefore rendering the whole assessment bad in law which is based on a) borrowed satisfaction b) After a gap of four years c) Without disposing the objections of the Appellant about the date of recording reasons for reopening and approval

Vikas Malik, New Delhi vs. ITO Ward - 39(4), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1569/DEL/2020[2011-12]Status: DisposedITAT Delhi29 Jul 2024AY 2011-12

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Ms. Rano Jain, Adv. &For Respondent: Sh. Amit Katoch, Sr. DR

Section 144Section 147Section 148Section 151Section 234ASection 271(1)(b)Section 271(1)(c)Section 44A

quashed as the same has been reopened on the basis of the reasons which are vague and has been recorded only on borrowed satisfaction. 6. (i). On the fact and circumstances of the case, Id. CIT(A) has erred both on facts and in law in rejecting the contention

Abhay Shaligram Patil, Mumbai vs. Income Tax Officer - 23(1)(1), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 995/MUM/2024[2012-13]Status: DisposedITAT Mumbai26 Jul 2024AY 2012-13

Bench: Shri Amit Shukla & Shri Ratnesh Nandan Sahayassessment Year: 2012-13 Abhay Shaligram Patil Income Tax Officer- B-8/60, 23(1)(1), 1St Floor, M I G Colony, Vs. Kalanagar, Room No. 106, Bandra (East), Matru Mandir, Mumbai- 400051. Grant Mandir, Pan: Abppp1649G Mumbai- 400007. (Appellant) (Respondent) Present For : Assessee By : Shri Yogesh Thar A/W. Shri Deep Chauchan, A.R. Revenue By : Shri R. R. Makwana- Sr. D.R.

For Appellant: Shri Yogesh Thar a/w. Shri Deep Chauchan, A.RFor Respondent: Shri R. R. Makwana- SR. D.R

Section 143(2)Section 143(3)Section 147Section 148Section 234ASection 250Section 45Section 54Section 56

basis of so-called information received from the AO of the Housing Society of which the Appellant is a member, the same amounted to borrowed satisfaction' without application of mind on the part of the AO which is not 3 Abhay Shaligram Patil permissible and therefore

DCIT CC -4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

ITA 3614/MUM/2023[2018-19]Status: DisposedITAT Mumbai24 Jul 2024AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

shows that the AO has coherently recorded the reasons and formed his independent view. Hence, the contention of the appellant that this amounts to borrowed satisfaction is REJECTED. 5.2. One of the contentions of the appellant is that the reopening beyond 4 years was not correct. Explanation

DCIT CC -4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

ITA 3610/MUM/2023[2020-21]Status: DisposedITAT Mumbai24 Jul 2024AY 2020-21

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

DCIT CC 4 (4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3606/MUM/2023[2014-15]Status: DisposedITAT Mumbai24 Jul 2024AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

amounts independent view. Hence, the contention of the appellant that this amounts independent view. Hence, the contention of the appellant that this amounts to borrowed satisfaction is REJECTED. to borrowed satisfaction is REJECTED. 5.2. One of the contentions of the appellant is that the reopening

DCIT CC 4 (4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3605/MUM/2023[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

DCIT CC 4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3603/MUM/2023[2016-17]Status: DisposedITAT Mumbai24 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

DCIT CC 4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

The appeal of the Revenue is dismissed

ITA 3602/MUM/2023[2017-18]Status: DisposedITAT Mumbai24 Jul 2024AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3491/MUM/2023[2014-15]Status: DisposedITAT Mumbai24 Jul 2024AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle 4(4), Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3474/MUM/2023[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3473/MUM/2023[2016-17]Status: DisposedITAT Mumbai24 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3472/MUM/2023[2017-18]Status: DisposedITAT Mumbai24 Jul 2024AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C